March 2026 monthly investment news

Equity markets experienced sector rotations, with some sectors outperforming while others lagged, resulting in mixed overall performance.

Meanwhile, fixed income markets saw notable rallies, largely due to declining yields as investors sought safety amid uncertainty.

Commodities, especially precious metals and oil, delivered robust gains, fuelled by renewed demand for tangible assets and heightened geopolitical risk factors.

Central banks maintained cautious approaches, choosing to keep interest rates unchanged in light of uneven inflation trends and persistent global uncertainty.

Activity

In February, we increased our oil allocation by reducing short-term bonds in the Active Allocation Fund (AAA), which flow through to the Prisma funds. The AAA fund remains modestly underweight in equities. At the sector and sub-sector levels, our positioning is near neutral for Financials and Software.

We maintain a small underweight in Consumer Discretionary and a small overweight in both Semi-conductors and Materials. Although the AAA fund is overweight fixed income overall, this reflects a higher allocation to short-term bonds versus its benchmark, while remaining underweight in medium and longer-term bonds.

These combined positions leave us with an underweight bond duration position versus benchmark for the multi asset funds.

Equity markets

Global equity markets showed mixed results in February, with non-US markets outperforming the US. Technology-related stocks continued to lag as investors became more selective about which business models would benefit from AI investment.

The Magnificent Seven Index saw its largest decline since March 2025, driving a rotation from concentrated leaders into broader cyclical and defensive sectors.

Eurozone equities advanced, supported by improving economic signals and ongoing rotation away from US markets. In euro terms, Materials (10.9%) and Utilities (9.4%) led sector gains, while four sectors, including Communication Services (-3.8%) and Information Technology (-3.2%), finished in negative territory.

Bonds and interest rates

Treasury prices rallied in February, driven partly by increased risk-off sentiment as Middle East tensions rose later in the month. The US 10-year Treasury yield fell more than 30 basis points to 3.94%, marking its largest monthly drop since February 2025.

In Europe, long-term yields in core markets fluctuated as government bonds reflected slower economic growth and diminished expectations for policy tightening. As anticipated, the Fed held rates steady at 3.5%–3.75%, focusing on data dependency, while the ECB also kept rates unchanged, citing uneven inflation and heightened global uncertainty.

Commodities and currencies

Precious metals posted gains in February following a strong January, with gold rising 7.9%. This sustained strength signals investors’ preference for real assets amid falling yields and elevated geopolitical tensions.

Energy prices rose, as WTI crude gained 2.8% in February, closing at $67.02 per barrel and rising further in early March due to increased risk from the recent US-Iran conflict.

The US dollar stayed firm, with 1 Euro purchasing 1.18 USD at month-end, supported by higher Treasury yields and a cautious Federal Reserve stance, keeping investor sentiment steady amid ongoing uncertainty.